How do rig costs affect drilling costs?

3.1. Drilling Cost Drivers Onshore drilling costs are majorly driven by the rig contract costs, which include rental and associated services and may account to up to 40% of the total cost of the well. The longer the drilling time the higher the rig costs because the rig is normally charged at a daily rate or a combination of turnkey and daily rate.

How much does a rig cost per day?

The rig daily rate will vary according to the rig type, water depth, distance from shore and drilling depth. For onshore, it will be <100,000 $/day, and for deepwater offshore Gulf of Mexico, it can be very high—up to 600,000 to 800,000 $/day (values are from 2010). The number of days will be a function of depth.

Does rig cost increase onsite cost?

He identified that future well cost may be estimated from known or estimated rig rate. His analysis led to the conclusion that 50% increase in rig costs may result in 25% increase in total onsite cost, and 100% increase in rig cost and tubulars together with 50% increase in services ‘cost may lead to 60% increase of the total well cost.

How much does it cost to drill an offshore well?

Based on reports from the Canadian Association of Petroleum Producers, the cost of drilling an offshore well in Atlantic Canada usually takes from 3–4 months and costs upwards of $150–200 million per well . Thus, drilling costs and time vary greatly on the environment and type of well.

How much does drilling cost?

As demonstrated by Bonakdarpour et al. , drilling costs represented approximately 40–60% of the cost of a well based on a statistical analysis of a large number of data, and the category of each cost item was listed with its percentage of the total cost.

How do you calculate a rig cost?

If you purchase the rig, amortize the purchase price over the useful life of the rig to obtain a daily cost. Labor costs: This includes the salaries or wages of drilling personnel, such as drillers, tool pushers, and other support staff. This should be calculated as a daily cost based on the number of personnel and their daily wage.